As an update to an earlier post entitled Judges Reject Constitutional Challenges to PPACA, United States District Court Judge Henry Hudson of the Eastern District of Virginia upheld a challenge to the constitutionality of the Patient Protection and Affordable Care Act (the PPACA), P.L. 111-148. The challenge, filed and argued by Virginia Attorney General Ken Cuccinelli, is the first favorable ruling out of the many to have challenged the constitutionality of the PPACA.

There is a growing trend in the health insurance industry to move toward what has been termed a value based health insurance model. The value based model, while still in its early testing stages, encourages individuals to utilize services when the clinical benefits to the patient associated with those services exceed the cost, while discouraging individuals from utilizing (or over-utilizing) services from which the health benefits to the individual do not justify the cost for those services.

United States District Court Judge Norman K. Moon on November 30, 2010, dismissed a lawsuit filed by Liberty University challenging the constitutionality of the Patient Protection and Affordable Care Act (PPACA). Specifically, Liberty University alleged in its lawsuit (among other allegations) that the provision contained in the PPACA requiring individuals to purchase and maintain health insurance was unconstitutional in that it was an improper exercise of congressional authority under the Commerce Clause of the United States Constitution. Judge Moon disagreed and in his opinion dismissing the lawsuit concluded that Congress in fact had a rational basis to conclude that individuals decisions regarding how and when to pay for health care is indeed an activity that in the aggregate substantially affects the interstate health care market. Liberty University has stated that it plans to promptly appeal the decision to the United States Court of Appeals for the Fourth Circuit.

Updating a previous blog entry dated October 15, 2010, Centers for Medicare and Medicaid Services (CMS) has published its final rule on November 29, 2010, to implement the requirements of the Patient Protection and Affordable Care Act (PPACA) regarding disclosure of alternate providers of MRI, CT and PET diagnostic imaging procedures when referring a patient for such procedures pursuant to the Stark Laws in-office ancillary services exception.

Already passed by the Senate at the end of November, the United States House of Representatives on December 7, 2010, passed the Red Flag Program Clarification Act of 2010. The bill will now be sent to President Obama for signature.

A physician may not voluntarily abandon a patient. After a physician has accepted a patient, s/he has a duty to continue providing services as long as they are necessary. Even in situations where personal attention is no longer necessary in treatment of a particular condition, if the case calls for it, the physician must provide the patient with instructions as to care.

Although there is no obligation for a physician to accept anyone who seeks his/her services as a patient, once the patient is accepted for an appointment, there is certainly some support for the proposition that a physician-patient relationship has been created, particularly given the patients expectations after scheduling the appointment. Virginia courts will consider whether the patient has entrusted her treatment to the physician and whether the physician has accepted the case. Notably, in one Virginia Supreme Court case, where the defendant granted an appointment at a designated time and place for the performance of a specific medical service within the defendants expertise, the Court found it sufficient to allege a consensual transaction giving rise to a physician-patient relationship and a duty to perform the service contemplated.

The Supreme Court of Virginia has addressed what is required to give rise to a physician-patient relationship. In one case, the issue was whether an on-call attending physician at a teaching hospital owed a duty of care to a patient, based on the physician-patient relationship, where there was no direct contact with or consultation about the patient. While on-call, the physician was not physically present at the hospital, but she was available to answer questions for treating residents and interns. The patient was admitted to the hospital and treated while the physician was on-call. However, the physician was never consulted or called about the patient. After being released, the patient was readmitted the following day and for the first time saw the physician. The patient ultimately died, and the patients estate alleged that the attending physician was on-call and therefore had a duty to supervise and was responsible for medical care given while she was on-call.

In Virginia, the physician-patient relationship and corresponding duty is governed primarily by case law. Generally, there is no obligation for a physician to accept anyone who seeks his services as a patient. Instead, the physician-patient relationship is a consensual transaction. It is akin to a contractual relationship and can be express or implied, general or special. The physicians contract with the patient is to treat the patients condition with reasonable diligence and skill.

Strong evidence of fully informed consent is the best defense against both types of consent claims. Medicare and the Joint Commission require hospitals to maintain consent forms containing certain information. Become familiar with your hospitals consent forms, policies/procedures, by-laws and rules/regulations, as the hospitals established process provides a valuable framework. Although the hospital staff plays an important role in obtaining the signed consent form(s), the primary liability for lack of informed consent and battery lies with the physician, who knows the appropriate risks and alternatives to disclose and provides the treatment.

What is the legal significance of the consent forms your patients routinely sign? Can patients file suit for bad outcomes when they were informed of the risks? What is the role of the physician versus the hospital staff in the consent process? Can a minor ever consent to treatment? This post and the next will address these questions.

To take advantage of the available peer review and quality assurance privilege, your practice needs to ensure that the committee and process are developed in accordance with the statute. To qualify, your practices committee must be established pursuant to guidelines approved or adopted by (a) a national or state peer review entity, (b) a national or state accreditation entity, (c) a national professional association of health care providers or a Virginia chapter of a national professional association of health care providers, (d) a licensee of a managed care health insurance plan (MCHIP) . . . or (e) a statewide or local association representing health care providers licensed in the Commonwealth . . . .

Peer review and quality assurance activities support quality patient care, but they also can create discoverable information in civil litigation. For many years, hospitals in Virginia have been able to carry out peer review and quality assurance activities with nearly complete confidentiality pursuant to state statute. Office practices previously had no such protection, but Virginia legislation has expanded the scope of privileged communications to non-hospital based quality assurance and peer review committees. Physician practices may now develop a formal peer review/quality assurance process and be protected by a privilege that will shield from discovery the proceedings, minutes, records, and reports . . ., together with all communications, both oral and written, originating in or provided to the committee. Va. Code Section 8.01-581.17(B). In the next post, I will outline the best way to develop that committee and process.

A grandfathered heath plan is any existing group health plan, including self-insured plans, or health insurance coverage in which a person was enrolled on or before March 23, 2010. A grandfathered plan must continue to cover someone (even if not the same individual) from March 23, 2010 forward to maintain its grandfathered status. New employees and family members are able to be added to coverage under the plan without affecting the grandfathered status.

The Patient Protection and Affordable Care Act (PPACA) amended the Stark Law by modifying the hospital ownership (whole hospital) exception, codified at 42 U.S.C. 1395nn(d)(3). The whole hospital exception allows physicians to refer Designated Health Services (DHS) for Medicare or Medicaid patients to hospitals owned by the referring physician or an immediate family member of the referring physician. The referring physician has to have an ownership in the entire hospital, not just in a distinct department of the hospital. This exception will now only apply to hospitals in which the physician had an ownership or investment interest on December 31, 2010 (Grandfathered physician-owned hospitals). In other words, no new physician-owned hospitals will be permitted after December 31, 2010.

The interim final rules published by the HHS, DOL and the IRS provided details regarding the external review requirements under the Patient Protection Affordable Care Act (PPACA). Group health plans and insurers must comply with the external review processes under the regulations. A group health plan not subject to state external review processes is required under the PPACA to comply with the federal external review process. The regulations that are currently available do not fully address what it means to have a compliant federal external review process. The agencies have stated that the standards for the federal external review process will be based on NAIC Uniform Model Act.

As we continue to unpack the various provisions of the Patient Protection Affordable Care Act (PPACA), this particular post will focus on the new regulations regarding the processes for internal claims and appeals, as well as external review processes, for group health plans and group health insurance insurers. The Internal Revenue Service (IRS), Department of Labor (DOL) and the Department of Health and Human Services (HHS) published the interim final regulations implementing new Sec. 2719 of the Public Health Service Act (PHS Act), as added by Sec. 1001 of the PPACA regarding internal claim and appeal processes and external review processes on July 23, 2010. These regulations became effective on September 21, 2010 and apply to the group health plans for plan years beginning on or after September 23, 2010. The regulations do not apply to grandfathered health plans.

Each fiscal year the Department of Health and Human Services Office of Inspector General ("OIG") releases a Work Plan that establishes a list of issues that OIG will focus on as priorities during the coming fiscal year. All health care entities are well advised to monitor and evaluate the Work Plan each year in order to understand which areas of its practice and which third-party reimbursement priority issues may be relevant to its practice for the coming fiscal year. OIG issued the 2011 fiscal year Work Plan on October 1, 2010.

Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) will mandate that new state based marketplaces are created to offer small businesses and otherwise uninsured individuals affordable health insurance plans that meet certain government prescribed benefits standards. This is what has been referred to as the health care exchange. Most, if not all, of us have heard of the concept of the insurance exchange, but many of us still have questions as to how exactly the exchange will work and what it will look like. Of course, many of the answers to these questions will have to wait for the Centers for Medicare and Medicaid Services (CMS) to issues regulations to implement the exchange, but this post will discuss in a very general manner the overall goal and approach to the implementation of the health insurance exchange concept.